Abu Dhabi: Dubai-based oil retailer Emirates National Oil Company (Enoc) said on Saturday the cost of providing subsidised fuel to its customers is expected to lead to a loss of Dh2.7 billion for the company this year.
"The current scenario, where Enoc has to bear the burden of higher international fuel prices while at the same time distributing fuel at subsidised rates, is clearly not sustainable or viable for the company.
"Enoc looks forward to the support of the concerned authorities in addressing the concern," the company said in a statement.
A spokesman for Enoc declined to elaborate on the company statement when reached by Gulf News.
Petrol prices in the UAE are state-set. According to June estimates, the UAE state oil marketing companies were losing an estimated Dh16.5 million a day on petrol sales as the difference between state-set prices and the cost of imports increased.
The losses have come down a bit since for the oil marketing companies as the international crude prices have been trading in a narrow range due to global economic growth slowdown worries.
However, Brent crude on the London market continues to trade above $110 a barrel, while the prices on the New York Mercantile Exchange have been hovering around $85 a barrel, allowing little respite for Dubai retailers, who import all their petrol at market-determined prices.
The petrol grade which sells at Dh1.72 a litre in the UAE must be sold close to Dh3.10 a litre to reflect the true market price. As matters stand, the oil retailers are losing above Dh6 for every gallon of petrol sold.
The UAE's petrol consumption is estimated to be slightly higher than five million litres per day. The current domestic prices of petrol reflect international crude oil prices of about $55 a barrel.
The four UAE oil retailers — Adnoc Distribution, Enoc, Eppco and Emarat — are paid by the government to cover the cost of subsidies.
